Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Rate per Direct Labor Hour Variable costs Annual Fixed Costs Indirect labor $0.43 Supervision $41,040 Indirect materials 0.51 Depreciation 16,080 Factory utilities 0.30 Insurance 13,800 Factory repairs 0.20 Rent 29,520 The master overhead budget was prepared on the expectation that 478,700 direct labor hours will be worked during the year. In June, 38,800 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.47, indirect materials $0.49, factory utilities $0.32, and factory repairs $0.25. Fixed: same as budgeted. v (a) & (b) (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 39,600 to 53,700 direct labor hours. Use increments of 4,700 direct labor hours. (List variable costs before fixed costs.) ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2020
Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Rate per Direct Labor Hour Variable costs Annual Fixed Costs Indirect labor $0.43 Supervision $41,040 Indirect materials 0.51 Depreciation 16,080 Factory utilities 0.30 Insurance 13,800 Factory repairs 0.20 Rent 29,520 The master overhead budget was prepared on the expectation that 478,700 direct labor hours will be worked during the year. In June, 38,800 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.47, indirect materials $0.49, factory utilities $0.32, and factory repairs $0.25. Fixed: same as budgeted. v (a) & (b) (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 39,600 to 53,700 direct labor hours. Use increments of 4,700 direct labor hours. (List variable costs before fixed costs.) ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Problem 10-2A a-b, d (Part Level Submission) (Video)
Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing
overhead budget for the Ironing Department, which is based on an activity index of direct labor hours.
Rate per Direct
Labor Hour
Variable costs
Annual Fixed Costs
Indirect labor
$0.43
Supervision
$41,040
Indirect materials
0.51
Depreciation
16,080
Factory utilities
0.30
Insurance
13,800
Factory repairs
0.20
Rent
29,520
The master overhead budget was prepared on the expectation that 478,700 direct labor hours will be worked during the year. In June, 38,800 direct labor hours were worked. At that level of activity, actual costs were as shown below.
Variable-per direct labor hour: indirect labor $0.47, indirect materials $0.49, factory utilities $0.32, and factory repairs $0.25.
Fixed: same as budgeted.
v (a) & (b)
(a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 39,600 to 53,700 direct labor hours. Use increments of 4,700 direct labor hours. (List variable
costs before fixed costs.)
ZELMER COMPANY
Monthly Manufacturing Overhead Flexible Budget
Ironing Department
For the Year 2020
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